Budapest, February 25 (MTI) – Hungary is in a stable financial position, with the budget deficit mostly financed by taxpayers and low interest rates reducing spending by up to 100 billion forints (EUR 327m) a year, the head of the State Debt Manager said in an interview published by business daily Napi Gazdasag on Wednesday.
The paper quoted Gyorgy Barcza as saying that while the state had paid 1,300 billion forints in interest in the years 2011-12, in 2015 the government had allocated 1,150 billion forints for the purpose. Barcza added that the funds saved on lower interest rates could be used for other purposes or to reduce taxes. He also said that low forint interest rates last year could further reduce spending in the next two years.
Concerning the public debt, Barcza said that it stood at 81 percent of GDP in 2010, or in fact as high as 83-84 percent including the indebted state-owned companies such as national railway MAV or Budapest’s public transport company BKV. That ratio has now been reduced to 76 percent at the current forint-euro rate of 306, and could be lowered to around 70 percent by 2018, Barcza said.